What Are The CPF Housing Grants For HDB BTO and Resale Flats

Heartland Boy was very impressed with Jeraldine Phneah’s savvy use of the housing grants available to reduce the cost of her HDB resale flat. He compares this with his own experience where the Heartland Couple did not enjoy any subsidy when they bought their HDB BTO in 2014. It got him thinking about how the various CPF housing grants available for HDB Resale and BTO flats. Besides factors such as the length of the leasehold, waiting time, CPF housing grants will add a further dimension to the age-old dilemma of HDB vs BTO. CPF Housing Grants are critical because it helps to reduce the cost of a flat. They are especially critical for young working adults as it makes home ownership within easier reach. As such, this article will focus on what are the CPF Housing Grants available for HDB BTO and Resale Flats.

What Is A CPF Housing Grant?

A CPF Housing Grant is given by the Singapore Government to reduce the cash outlay of buying your home. There are various types of housing grants given to HDB Flats, DBSS Flats, and Executive Condominiums (‘EC’), etc. Successful applicants (whether first-timer or second-timers), will first receive the housing grants in their CPF accounts. The CPF Housing Grants are then withdrawn to subsidise the initial purchase price. It cannot be used for the minimum cash downpayment and monthly mortgage instalment payments.

Many have wondered if these CPF Housing Grants are considered free monies from the government. Heartland Boy’s thinks that is the case, but do note that interest will also accrue on the housing grants disbursed to you. In the event of a sale of your HDB flat, the sale proceeds will be deposited back into your CPF ordinary account to pay back the CPF Housing Grants taken and its accrued interest. Only sums in excess of this amount can be withdrawn as cash.

Having explained what a CPF Housing Grant is, these are the various subsidies available to prospective home-owners of HDB BTO and resale flats.

CPF Housing Grants For HDB BTO Flat

1. Additional CPF Housing Grant (‘AHG’)

In general, the Additional CPF Housing Grant is meant for lower and middle-income families. It does not discriminate against flat type or flat location.

Eligibility

First-time homeowners;

At least 1 of the applicants must have worked continuously for 12 months prior to flat application;

Household income ceiling of $5,000. Actual grant given will depend on actual income, with lower-income households receiving a higher amount as shown in Table 1.

Table 1: Additional CPF Housing Grant (Source: HDB)

Singles are also eligible for AHG provided that eligibility criteria are met. To determine the amount of AHG granted, the household income ceiling is halved and the subsidy dispensed is also halved accordingly.

2. Special CPF Housing Grant (‘SHG’)

The Special CPF Housing Grant can be given in addition to AHG. However, the SHG discriminates according to flat type and flat location. The purpose of this grant is to incentivise new homeowners to stay in non-mature estates and opt for smaller units. Non-mature estates are defined as areas that are less than 20 years old.

Eligibility

First-time homeowners;

Applicable for those buying 4-room or smaller new flat in a non-mature estate;

At least 1 of the applicants must have worked continuously for 12 months prior to flat application;

Monthly household income of up to $8,500. Actual grant given will depend on actual income, with lower-income households receiving a higher amount. The different types of bands are calculated and shown in Table 2.

Table 2: Special CPF Housing Grant (Source: HDB)

Singles are also eligible for SHG provided that eligibility conditions are met. To determine the amount of SHG granted, the household income ceiling is halved and the subsidy dispensed is also halved accordingly.

CPF Housing Grants For HDB Resale Flat

1. Enhanced CPF Housing Grant/Family Grant

This is a CPF Housing Grant given only to HDB resale flats. It serves to mitigate the impact of the subsidy that first-time home-owners are missing out on when they opt to purchase a HDB resale over a BTO flat.

Eligibility

First-time homeowners purchasing a resale flat that is 2-room or larger;

Household income ceiling of $12,000. Actual grant given depends on size of flats, with larger grant given to smaller flats. The citizenship of the applicants will also affect the Enhanced CPH Housing Grant disbursed as shown in Table 3.

Table 3: Enhanced CPF Housing Grant/Family Grant (Source: HDB)

For applicants who are single and of Singaporean nationality, this will be known as the Enhanced CPF Housing Grant For Singles or simply, Singles Grant. $20,000 will be disbursed for a 5-room resale flat while $25,000 will be disbursed from 2 to 4-room resale flats.

2. Additional CPF Housing Grant (‘AHG’)

In general, the Additional CPF Housing Grant is meant for lower and middle-income families. It does not discriminate against flat type or flat location. This can be disbursed on top of the Enhanced CPF Housing Grant.

Eligibility

Meet all the requirements of the Enhanced CPF Housing Grant/Family Grant;

At least 1 of the applicants must have worked continuously for 12 months prior to flat application;

Household income ceiling of $5,000. Actual grant given will depend on actual income, with lower-income households receiving a higher amount as shown in Table 1 previously.

3. Proximity Housing Grant (PHG)

The proximity housing grant provides financial assistance for families buying a HDB resale flat to live with or stay near their parents. Therefore, it only discriminates on location. There is no household income ceiling restriction and applicants also need not be first-time homeowners.

The PHG can be disbursed on top of Enhanced CPF Housing Grant and the AHG. If you add all 3 types of grants together, the HDB Grants limit would be $120,000.

Do note that PHG will not be disbursed for those applying for HDB BTO unit. It should not be confused with the Married Child Priority Scheme which increases your ballot chances if you are applying for a BTO unit close to your parents’ HDB flat.

Eligibility

Applicant is Singapore Citizen and family nucleus must comprise at least another Singapore Citizen/Singapore Permanent Resident;

Homeowners buying a resale flat (2-room or larger) within 4 km or where parents are staying, or are intending to stay with them in the same flat;

Applicant has not received PHG previously.

The amount dispensed under PHG is shown in Table 4.

Table 4: Proximity Housing Grant For HDB Resale Flat (Source: HDB)

Singles are also eligible for PHG provided that eligibility conditions are met. The subsidy dispensed will be halved although the proximity distance remains the same at within 4km. That is, if the single is buying a resale flat to live with his/her parents; the PHG would be $15,000. If the single chooses to stay within 4km of his/her parents, the PHG grant would be $10,000.

Maximum HDB Housing Grants Available

Having explained the various housing grants available to prospective home-buyers, Heartland Boy realised that there is a “small window of opportunity” for young working adults to maximise the CPF Housing Grants. In the scenario of a young couple whereby one partner just started working while the other is still a university student, buying a 4-room HDB BTO flat in a non-mature area will maximise the number of grants available.

Regardless, hopefully this article will be useful for those who are trying their chances at the upcoming May 2018 BTO Sales Launch or the Sales of Balance Flats (‘SBF’) exercise.